What are the main businesses and services of Zhonghe Rural Credit Cooperative?

In 2008, there were more than 300 pilot institutions of poverty alleviation microfinance in China, many of which were larger and started earlier than Zhonghe Rural Credit Cooperatives. But up to now, only a few companies, such as Zhonghe Rural Credit Cooperative, have survived, because only these companies have achieved sustainable development in business. Many poverty alleviation organizations established after the Wenchuan earthquake have been evacuated one after another, but the organizations of Zhonghe Rural Credit Cooperatives in Wenchuan are still in operation and have served the local area for more than ten years. Liu, chairman and general manager of Zhonghe Rural Credit Cooperative, told China Economic Weekly.

The predecessor of Zhonghe Rural Credit Cooperative is the Microfinance Department of China Foundation for Poverty Alleviation. 1996 inspired by "Yunus model", the State Council Poverty Alleviation Office started the pilot of "Farmers' Self-help Center" and handed it over to the Poverty Alleviation Foundation for management. At the same time, it is also a government poverty alleviation project supported by the World Bank, which aims to provide small loans to farmers in poor rural areas without mortgage or public guarantee. It is hoped that a new model of "development-oriented poverty alleviation" will be explored through this pilot project.

Liu said that at the beginning of its establishment, Zhonghe Rural Credit Cooperative set three goals: one is to lend money to the real poor (especially women), the other is to improve the comprehensive ability of the poor, and the third is to realize the sustainable development of the organization. "It should be said that many institutions have achieved the first two points, but it is not easy to achieve three points. Among the few implementers, Zhonghe Rural Credit Cooperative is the largest. Even compared with the international level, our efficiency and technical level are the highest in the world. " He said.

According to Liu, the development of Zhonghe Rural Credit Cooperative has gone through three stages. In the first stage, 1996 was established as a pilot poverty alleviation project of the government, and then it was managed by the poverty alleviation foundation.

The second stage began in 2005, when the Foundation for Poverty Alleviation decided to transform the project into market-oriented operation and independent operation, and began to introduce market capital and commercial funds. In 2008, the Foundation for Poverty Alleviation formally divested all microfinance projects and their non-financial services and established an independent company.

In the third stage, since 2009, Zhonghe Rural Credit Cooperative has been officially incorporated, and the commercial transformation has begun with the 20 10 World Bank International Finance Corporation and Sequoia Capital starting to invest in Zhonghe Rural Credit Cooperative.

Liu said that at present, the main shareholders of Zhonghe Rural Credit Cooperative are (Detai Investment), Sequoia Capital China, Renda Pratt & Whitney, Tiantianshang Fund and so on. The investment in Zhonghe Rural Credit Cooperatives is mainly divided into two categories: one is influence investment, and the other is ordinary commercial investment. "Impact investment is different from investing in general commercial institutions. This is a supportive investment in enterprises. Now many investment institutions are doing impact investment funds to better balance social benefits and operational benefits. " He said.

Liu also revealed that the loan interest rate of Zhonghe Rural Credit Cooperatives is higher than that of banks because of the high cost. Compared with many other institutions, it can be found that microfinance institutions generally have the characteristics of high interest rates and high costs, but the average profit rate is not high. "Zhonghe Rural Credit Cooperatives did not make huge profits. Our current business status is to protect the capital and make a small profit, because our main goal is to make the plate bigger and serve more people in need. "